Does Power Of Attorney End At Death?

A power of attorney is one of the most valuable estate planning tools, especially for those trying to protect their interests in case they get incapacitated. This is because power of attorney allows the principal to appoint a trusted person as an agent, allowing them to act on their behalf in various financial and legal matters. 

But how long does it stay effective and does power of attorney end at death?

In short, no. Power of attorney is only effective while the principal is still alive, meaning it expires once the principal passes away.

This doesn’t mean that it’s limited as an estate planning instrument. Rather, it should have a specific role in your estate plan. With that said, let’s explore the basics of power of attorney and go into the question of ‘does the power of attorney end at death’ in more detail. 

Basics Of Power Of Attorney

As we briefly mentioned, a power of attorney is a legal document allowing an individual to authorize a trusted person to act on their behalf in distinct circumstances. It can be as broad as the principal wants or limited to only certain situations. 

In most cases, people appoint family members as agents of their power of attorney, while others appoint their legal representatives or other professionals such as financial advisors.

There are different types of power of attorney, all of which can be used for particular goals. For instance, an individual may need someone who will only handle their financial affairs (financial power of attorney), while others may only want to authorize a close family member to make medical decisions on their behalf if they’re unable to do so on their own (healthcare power of attorney).

Similarly, power of attorney can be either durable or non-durable. The former stays effective even if the principal is incapacitated, while the latter expires the moment the principal becomes incapacitated. 

Does Power Of Attorney Expire When The Principal Dies?

A power of attorney stops being valid after the principal dies. This applies to all types of power of attorney. For example, does power of attorney end at death if it’s durable is a common question we get from many people. 

The answer is yes.

This even applies to the power of attorney documents that are specific in their instructions. Regardless of the terms of the document, a power of attorney loses its significance once the principal passes away.

Sure, this may seem like a downside, but keep in mind that this document was only created to grant someone authority over the principal’s matters during their lifetime. Once the power of attorney expires, the probate process starts and everything will revolve around dividing the principal’s assets. 

There are other ways a power of attorney can expire, as it’s not just limited to death. The principal can always revoke the document at any time. Furthermore, the power of attorney may also include an expiration condition akin to an expiry date, which is incapacitation for non-durable power of attorney.

How Does Probate Work?

The family is often concerned regarding what they can do about the decedent’s financial affairs. They may wonder how they can cash a check or withdraw money, and they generally assume that the power of attorney will have control over these matters.

All of those questions are insignificant because the probate process will take place, at which point, the power of attorney is completely out of the picture. Rather, the crux of the process will be handled by a personal representative named in the will. Similar to the agent in a power of attorney, the personal representative is selected by the decedent, and their only task is administering and distributing the estate during probate. 

If the decedent passes away without leaving the will, the probate court will appoint a family member to act as a personal representative or an estate administrator.

If you previously fulfilled the role of a power of attorney, there is a possibility that your loved one also named you as a personal representative of the estate, so you don’t need to worry about someone else taking over control of the process. Even if there is no will, the family will have a say in who will be appointed to administer the estate. Hence, if you fulfilled your duties in the past effectively, you may continue to do so after the decedent is no longer around. 

What Is An Abuse Of Power Of Attorney After Death?

In some situations, the agent may continue using the power of attorney after the decedent's death. They may, for instance, use the legal documentation to withdraw money from the decedent’s account before the bank is notified of death. 

This is considered power of attorney abuse and represents a serious offense that may result in civil charges, or if the actions are overwhelmingly damaging, even criminal charges. Power of attorney can also occur while the principal is still alive, like in the scenario where they exceed the scope of their authority or consciously commit fraudulent activity. 

Regardless of the circumstances, the agent should immediately cease all activity when the principal passes away to avoid facing the consequences. 

Taking Care Of The Business

To have a sense of safety in all areas of life, you should always have an effective estate plan in place to account for all the possibilities. A power of attorney is ineffective after death, which is why your estate plan should also include other legal instruments, such as a will or a trust, to help settle matters once the principal passes away. 

It’s important to note that no family situation is the same and each estate varies in size. As such, you may need a legal expert to take care of the business on your behalf, ensuring that your estate plan is as fruitful as possible. 

Here at the Law Offices of Mary E. King, estate and tax planning is our bread and butter. By carefully considering all the applicable factors, we can help you decide what type of estate plan will help you minimize your tax liability, avoid probate, and eliminate interpersonal issues when the assets get distributed. 

Schedule an appointment by calling 941-906-7585 or filling out our contact form.

Note: 

The information in this blog post is for reference only and not legal advice. As such, you should not make legal decisions based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.